January 2, 1882 – John D. Rockefeller Forms Standard Oil Trust, First Sanctioned Monopoly in America

John Davison Rockefeller Sr. was born in 1839 in New York State although the family moved to Ohio when he was a boy. His entrepreneurial nature showed up early; he went into a business partnership with Maurice Clark at age 20. They made good money, with the partners switching from the produce business to oil, building their first oil refinery in 1863. The new company was composed of Clark & Rockefeller, chemist Samuel Andrews, and Clark’s two brothers.

John D. Rockefeller in 1885

While other refineries would keep the 60% of oil product that became kerosene, but dump the other 40%, Rockefeller used the gasoline to fuel the refinery, and sold the rest as lubricating oil, petroleum jelly, and other by-products. Tar was used for paving, and naphtha was shipped to gas plants. Rockefeller also got into other aspects of the business, such as laying pipe and making barrels, thereby cutting costs and increasing profits even more.

In February 1865, Rockefeller bought out the Clark brothers for $72,500 (equivalent to $1 million in 2017 dollars) and established the firm of Rockefeller & Andrews. To take advantage of the post-Civil War boom, Rockefeller borrowed heavily, reinvested profits, and adapted rapidly to changing markets, which he followed by hiring observers to track them.

The company gradually gained dominance of oil refining and sales through horizontal integration, ending up with about 90% of the US market. It also continued the practice of vertical integration, by taking over other parts of the supply chain.


Another young successful entrepreneur, Henry Flagler, who had, by his mid-20s, made a fortune distilling whisky, was tapped as a partner by Rockefeller to run the transportation side of the business.

Rockefeller and Flagler wanted to bring in more capital without jeopardizing control. To do this, on January 10, 1870, they turned their partnership into a joint stock company, Standard Oil Company, along with three other men. Eventually, they developed it into one of the world’s first and biggest multinational corporations.

In response to the judicial and political attacks on Standard Oil in the 1870s and 1880s, the legal concept of the “trust” was refined by SO and formalized in the Standard Oil Trust Agreement on this date in history, January 2, 1882. As a site on trusts at Penn State explains:

At that time, corporations themselves could not own stock in other corporations. The shares were therefore held in ‘trust’, not for the Standard Oil of Ohio, but for the shareholders of that corporation. The shares issued in trust were 700,000 with 191,700 to Rockefeller, and 60,000 to Flagler. The trustees held the shares in the individual companies on behalf of the 41 shareholders of the Standard Oil Trust and had ‘general supervision’ of the 14 wholly owned and 26 partly owned companies. . . . . The senior management included Rockefeller, his bother William, Henry Flagler, and two others who together controlled four-seventh of the stocks.”

Standard Oil’s business practices created intense controversy. Much of what people believed about the role of competition in general and the Standard Oil Trust in particular was epitomized in the expose by the famous “muckraker” (investigative journalist), Ida M. Tarbell. Her father and brother both had small oil companies that had not successfully competed with Standard Oil. In her 1904 book The History of the Standard Oil Company, Tarbell fueled negative sentiment toward John D. Rockefeller, Sr. and his company. Tarbell dug into public documents across the country that described instances of Standard Oil’s strong-arm tactics against rivals, railroad companies, and others that got in its way. She reviewed testimony in court and before Congressional committees, as well as copies of pleadings in lawsuits. She talked to people inside the company and those who had competed against Standard Oil. And she succeeded in gaining their trust – a step where others had failed. She excoriated Rockefeller’s “ruthless tactics” and “destructive effect” on smaller oil businesses.

Ida M. Tarbell

Ida M. Tarbell

In actual fact, a study by John S. McGee, “Predatory Price Cutting: The Standard Oil (N.J.) Case,” 1 J. Law & Econ. 137 (1958) showed that the Standard Oil group seldom if ever charged prices below its own costs. McGee found that the record did not indicate that predatory price-cutting forced any refiner to sell out, nor that it was used to depress asset value of any of the more than one hundred and twenty refineries it purchased.

Research showed that Standard’s most effective method of growth was simply by merger with and acquisition of competitors. Rockefeller demonstrated to the small competitors that they could make more money by selling to him than by competing with him, so he gradually took over much of the competition. Further, Standard’s usual practice was to employ the managers and owners of the firms they absorbed.

Nevertheless, in November 1906 the government brought a bill of complaint under the Sherman Act against the Standard Oil Trust. The bill itemized an assortment of alleged grievances containing some enlightened and some misguided economic policy. The Complaint contained many allegations of ruthless tactics, rebates, and vertical integration. One of the key “ruthless tactics” consisted of charging low (but as McGee demonstrated, not predatory) prices.

The case reached the Supreme Court in 1910 and was decided in 1911.
In Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911) the Supreme Court of the United States found Standard Oil guilty of entering into contracts in restraint of trade and monopolizing the petroleum industry through a long convoluted series of anticompetitive actions. The court’s remedy was to affirm a lower court decree effectively dividing Standard Oil into several competing firms.


The real thrust of the opinion is that what we now call horizontal mergers and acquisitions are illegal if they entail substantially all the existing competition. Methods employed in the process were not considered relevant. Dirty pool tactics were later dealt with in 1914 when Congress passed the Federal Trade Commission Act, which proscribed “unfair methods of competition” and authorized the FTC to interpret and enforce the statute.

John D. Rockefeller, whose net worth would have been over $318.3 billion in current dollars according to Forbes Magazine, spent the last 40 years of his life in retirement. His fortune was mainly used for targeted philanthropy to foundations that had a major effect on medicine, education, and scientific research.

Henry Flagler became a key figure in the development of the Atlantic coast of Florida and founder of what became the Florida East Coast Railway. He is known as the Father of Miami and Palm Beach, Florida.

Henry Morrison Flagler


December 28, 1945 – Congress Officially Recognizes the Pledge of Allegiance

The Pledge of Allegiance, thought to have been written in 1892 by Francis Bellamy, was officially recognized by Congress only in 1945. “The Pledge” was published anonymously by a magazine for young people, The Youth’s Companion, on September 8, 1892, and was written in celebration of the 400th anniversary of the discovery of America. The published Pledge read:

“I Pledge allegiance to my Flag and the Republic for which it stands; one Nation indivisible, with Liberty and Justice for All.”

The Pledge was accompanied by instructions for a salute to be performed as part of the Columbus Day celebrations: “At the words, ‘To the Flag,’ the right hand is extended gracefully, palm upward, toward the Flag, and remains in this gesture till the end of the affirmation; whereupon all hands immediately drop to the side.”

Francis Bellamy

The first flag salute statute [requiring children in public schools to recite the Pledge of Allegiance] was passed in New York in 1898, the day after the United States declared war on Spain. New York’s state superintendent, in his Manual of Patriotism, included five possible ‘patriotic pledges’ that teachers might use in their classes. One of these was Bellamy’s, but it was placed fifth.

In 1940, the US Supreme Court ruled in Minersville School District v. Gobitis (310 U.S. 586) that a local school board could expel students who refuse to recite the Pledge. Justice Felix Frankfurter wrote:

So far as the Federal Constitution is concerned, it is within the province of the legislatures and school authorities of the several States to adopt appropriate means to evoke and foster a sentiment of national unity among the children in the public schools.”

In 1942, legislation was adopted by Congress “to codify and emphasize existing customs pertaining to the display and use of the flag of the United States of America.” The text of the pledge, as originally written and modified a bit by the National Flag Conference in 1923 and 1924, was inserted into this legislation (Public Law 829, Chapter 806, 77th Congress, 2nd session), but without designating it as the official pledge.

The small changes made to the text resulted in this version:

I pledge allegiance to the Flag of the United States of America and to the Republic for which it stands, one nation, indivisible, with liberty and justice for all.”

Congress also amended the Flag Code this year, substituting the original straight arm salute, associated with Nazi Germany, with the current salute of the right hand over the heart.

Schoolchildren in Southington, Conn., recite the Pledge of Allegiance in 1942, around the time the custom of placing a hand over the heart replaced the original hand position.

In 1943 the Supreme Court overturned the Gobitis decision in the case of West Virginia State Board of Education v. Barnette (319 U.S. 624). Justice Robert Jackson wrote that the compulsory state action violated the First and Fourteenth Amendments, and that “Under the Federal Constitution, compulsion as here employed is not a permissible means of achieving ‘national unity.'” He famously added:

If there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion or other matters of opinion or force citizens to confess by word or act their faith therein.”

Then in 1945, additional legislation was introduced into Congress by Representative Herman P. Eberharter of Pennsylvania, which amended the 1942 act to give official congressional sanction to the pledge.

The words “under God” were added by Congress on June 14, 1954, in response to the anti-Communist (and thus anti-atheist) opinion sweeping the country during the Cold War. This addition to the law, sanctioned by President Eisenhower, is still controversial. President Eisenhower said in signing the law:

From this day forward, the millions of our school children will daily proclaim in every city and town, every village and rural school house, the dedication of our nation and our people to the Almighty. To anyone who truly loves America, nothing could be more inspiring than to contemplate this rededication of our youth, on each school morning, to our country’s true meaning.”

Eisenhower was reportedly influenced by a sermon given by the Reverend George Docherty, who gave a sermon Eisenhower attended at his church in honor of Lincoln’s birthday.

The Washington Post reported:

To omit the words ‘under God’ in the Pledge of Allegiance is to omit the definitive factor in the American way of life,” Docherty said from the pulpit. He felt that ‘under God’was broad enough to include Jews and Muslims, although he discounted atheists: ‘An atheistic American is a contradiction in terms,’ Docherty said in his sermon. ‘If you deny the Christian ethic, you fall short of the American ideal of life.’”

George Docherty (left) and President Eisenhower (second from left) on the morning of February 7, 1954, at the New York Avenue Presbyterian Church; the morning that Eisenhower was persuaded by Docherty that the Pledge of Allegiance must be amended to include the words, “under God.”

The legislation for The Pledge is found in Title 4, Chapter 1, Section 4 of the U.S. Code.

The Federal legislation does not refer to schools; it is state and local law that mandates recitation of The Pledge in schoolrooms. Students may decline to participate, although as even the Supreme Court has recognized, the consequences could be deleterious. Schoolchildren of minority faiths, by so declining, would isolate themselves from classmates and open themselves up to ridicule and rejection.

The use of the phrase “under God” is still being contested and litigated. You can read more about it in this Smithsonian article.

December 23, 1901 – Immigration Restriction Act Helps Ensure Australia Stays White and British

On January 1, 1901, the six separate British colonies in Australia united to form the Commonwealth of Australia in a federalist government. As the Parliament of Australia reports on its website, immediately thereafter, the new federation passed polices designed to keep Australia white and British.

The Immigration Restriction Act 1901 passed on this day in history became the cornerstone of an effort – now called the “White Australia policy” – aimed at keeping Australia white. This focus shaped immigration policy in Australia for seven decades, until the final dismantling of the White Australia policy in the 1970s.

Like Jim Crow laws in the American South, while these acts did not specifically bar people by race, they took steps to ensure that result, such as, in the Immigration Restriction Act, by prohibiting the entry of any person who failed to write out a passage of 50 words in any European language as determined and dictated by a Customs officer.

The 1910 song, ‘March of the Great White Policy’ by W.E Naunton. (National Library of Australia)

The Australian Parliament site admits:

It is clear from members’ speeches that the Immigration Restriction Bill was about racial exclusion. William McMillan spoke about the desire ‘to prevent any alien or servile races from so occupying large territories in Australia, as to mix and interfuse, not merely among themselves, but with our own people’. The Leader of the Australian Labor Party, John Christian Watson, also expressed his concerns about ‘racial contamination’, declaring:

‘The objection I have to the mixing of these coloured people with the white people of Australia … lies in the main in the possibility and probability of racial contamination … The racial aspect of the question [to restrict migration to Australia], in my opinion, is the larger and more important one.’”

Prime Minister Edmund Barton, who introduced the bill, averred that democratic principles of equality did not extend to race:

I do not think either that the doctrine of the equality of man was really ever intended to include racial equality. There is no racial equality. There is that basic inequality. These races are, in comparison with white races — I think no one wants convincing of this fact — unequal and inferior. The doctrine of the equality of man was never intended to apply to the equality of the Englishman and the Chinaman. There is a deep-set difference, and we see no prospect and no promise of its ever being effaced. Nothing in this world can put these two races upon an equality [sic]. Nothing we can do by cultivation, by refinement, or by anything else will make some races equal to others.”[emphasis added]

Other acts followed in pursuit of the goal “to achieve and maintain a white, British national character.”

The White Australia Game was registered in 1914 and was popular throughout the 1920s. Migration Heritage Centre

In 1975, the progressive Whitlam government passed The Racial Discrimination Act that made it illegal to “offend, insult, humiliate or intimidate” someone because of their race.

Nevertheless, years of policies promoting and indoctrination reinforcing notions of white supremacy had done lasting damage. The Act was last updated in 1995, Amnesty International reported, after three major national inquiries – the Royal Commission into Aboriginal Deaths in Custody – the National Inquiry into Racist Violence and the Australian Law Reform Commission Report into Multiculturalism and the Law – found a strong link between racist conduct in public and racially-motivated violence.

As academics have argued, “Australia ideology is still shaping Australian immigration policies in the 21st century, especially in regard to refugees.” For example, similar to the situation in the United States, there are far right groups who contend that Islam poses a threat to Australia’s security.

There is also the matter of the offshore islands on which Australia houses asylum seekers. In 2016, The Guardian published a horrific expose about the trauma and abuse inflicted on these asylum seekers who are refused entry to Australia proper. The so-called “Nauru files” document assaults, sexual abuse, self-harm attempts, child abuse and squalid living conditions, painting a picture of routine dysfunction and cruelty.

Accommodation in the Nauru offshore processing facility shown in 2012.

But the mainland is not without problems for non-whites as well. Yassmin Abdel-Magied, an Australian author, activist, and mechanical engineer, reported:

I grew up believing if I became the ‘model minority’ — a hard-working, high-achieving, law-abiding brown Muslim woman — that I could make lasting positive change for myself and others. I thought if I were good enough, my example would make people see that their assumptions about Muslims and people of color were wrong. Once they got to know me, they would change their behavior and fix their biases, I thought.

History matters, because it informs the attitudes of the present society. As people of color have systematically been treated as second-class citizens, they are considered ‘conditionally Australian.’ The moment they step out of line, the country explodes with outrage.

Those who want you to outperform your identity aren’t interested in seeing you as equal at all. No one should ever have to be the ‘model minority’ in order to be accepted as equal. Equality should be given, not earned for good behavior. If ‘good behavior’ is required, that isn’t really equality.”

Moreover, as recently as August, 2018, a senator from Queensland, Fraser Anning, representing the far-right Katter’s Australian Party, called for a return to the “White Australia” policy. As NPR reported:

In [his first speech to Parliament], Anning lamented the demise of ‘our predominately European identity’ and called for a ‘drastic’ cut to immigration and a return to racially discriminatory preferences.

‘Diversity should be managed to remain compatible with social cohesion and national identity,” he said. ‘We as a nation are entitled to insist that those who are allowed to come here predominantly reflect the historic European-Christian composition of Australian society.'”

Rather frighteningly, he continued:

While all Muslims are not terrorists, certainly all terrorists these days are Muslims, so why would anyone want to bring more of them here?’ he asked.

‘The final solution to the immigration problem, of course, is a popular vote,’ Anning said, invoking the infamous term used by leaders of Nazi Germany to refer to the Holocaust.”

You can read the full text of the 1901 Immigration Restriction Act here.

December 18, 1944 – Supreme Court Decides Korematsu v. United States

Following the Japanese attack on Pearl Harbor on December 7, 1941, there was a great deal of anger and fear towards Japanese Americans.

President Franklin Roosevelt’s Executive Order 9066 (February 19, 1942) authorized the Secretary of War and U.S. armed forces commanders to declare areas of the United States as military areas “from which any or all persons may be excluded,” although it did not name any nationality or ethnic group. It was eventually applied to one-third of the land area of the U.S. (mostly in the West) and was used against those with “Foreign Enemy Ancestry” — Japanese, Italians, and Germans. In March of 1942, the War Relocation Authority was created to: “Take all people of Japanese descent into custody, surround them with troops, prevent them from buying land, and return them to their former homes at the close of the war.”

Even before the Japanese-Americans were relocated, their livelihoods were seriously threatened when all accounts in American branches of Japanese banks were frozen.

On May 19, 1942, western Japanese Americans were forced to move into relocation camps by Civilian Restrictive Order No. 1, 8 Fed. Reg. 982.


More than 120,000 American Japanese were taken from their homes and put in ten “relocation centers” and several prisons in California, Utah, Arkansas, Arizona, Idaho, Colorado, and Wyoming. Three categories of internees were created: Nisei (native U.S. citizens of Japanese immigrant parents), Issei (Japanese immigrants), and Kibei (native U.S. citizens educated largely in Japan).

These Japanese Americans, half of whom were children, were incarcerated for up to four years, without due process of law or any factual basis, in bleak, remote camps surrounded by barbed wire and armed guards. Families were crammed into 20- by 25-foot rooms and forced to use communal bathrooms. No razors, scissors, or radios were allowed. Children attended War Relocation Authority schools. None of them were ever charged of any crime against the United States.

In desert camps, the evacuees met severe extremes of temperature. In winter it reached 35 degrees below zero, and summer brought temperatures as high as 115 degrees. Rattlesnakes and desert wildlife added danger to discomfort. At Gila, there were 7,700 people crowded into space designed for 5,000. They were housed in messhalls, recreation halls, and even latrines. As many as 25 persons lived in a space intended for four.” (Report of the Commission on Wartime Relocation and Internment of Civilians.)

three boys_sm_jpg_490x999_upscale_q85

The Supreme Court delayed challenges to the mass incarceration until after the 1944 presidential election. Richard Reeves, in his book Infamy: The Shocking Story of The Japanese American Internment in World War II, quotes Assistant Secretary of War John J. McCloy declaring in a memo, “We can cover the legal situation . . . in spite of the Constitution. Why the Constitution is just a scrap of paper to me.”

It was not as if there were a great deal of sympathy for the Japanese in any event. Governor Chase Clark of Idaho declared: “The Japs live like rats, breed like rats and act like rats.” Nels Smith, Governor of Wyoming, told the Director of the War Relocation Authority, “If you bring Japanese into my state, I promise you they will be hanging from every tree.”

Reeves tells the story of the incarceration not only in terms of the officials who perpetrated the injustice or the heroes who fought against it, but also by relating the stories of the families themselves and what they endured. As he notes:

This is an American story of enduring themes: racism and greed, injustice and denial – and then soul-searching, an apology, and the most American of coping mechanisms, moving on.”

But in fact, few of the American Japanese affected by this process were able to return to their prewar lives. They had lost their money and property – losses were estimated by the government as more than $200 million in 1942 – as well as their jobs and their reputations.

A Japanese family returns home to find their garage vandalized with graffiti and broken windows in Seattle, May, 1945. AP Photo

A Japanese family returns home to find their garage vandalized with graffiti and broken windows in Seattle, May, 1945. AP Photo

Nevertheless, and importantly, Reeves emphasizes:

Through it all, the desert heat and windstorms and bitter cold, the breakdowns and suicides, the overwhelming majority of the Japanese aliens and Japanese Americans remained loyal to the United States.”

In Korematsu v. United States, 323 U.S. 214 (1944), the United States Supreme Court in a 6-3 decision concerning the constitutionality of Executive Order 9066, ruled that the exclusion order was constitutional. The opinion, written by Supreme Court Justice Hugo Black, held that the need to protect against espionage outweighed Fred Korematsu’s individual rights, and the rights of Americans of Japanese descent.

Justice Frank Murphy dissented, saying that the exclusion of Japanese “falls into the ugly abyss of racism,” and compared the rationale for the Japanese exclusion to that supporting “the abhorrent and despicable treatment of minority groups by the dictatorial tyrannies which this nation is now pledged to destroy.” He also compared the treatment of Japanese Americans, on the one hand, with persons of German and Italian ancestry, on the other, as evidence that race, rather than the emergency alone, led to the exclusion order which Korematsu was convicted of violating.

Justice Frank Murphy

Justice Frank Murphy

His stirring closing paragraph reads:

I dissent, therefore, from this legalization of racism. Racial discrimination in any form and in any degree has no justifiable part whatever in our democratic way of life. It is unattractive in any setting, but it is utterly revolting among a free people who have embraced the principles set forth in the Constitution of the United States. All residents of this nation are kin in some way by blood or culture to a foreign land. Yet they are primarily and necessarily a part of the new and distinct civilization of the United States. They must, accordingly, be treated at all times as the heirs of the American experiment, and as entitled to all the rights and freedoms guaranteed by the Constitution.”

On December 17, 1944, Public Proclamation No. 21, effective January 2, 1945, allowed evacuees to return home, just ahead of two new Supreme Court decisions finding that citizens should be allowed to go home after proving their loyalty.

In order to rejoin society, each individual received a $25 payment and transportation tickets at the time of release.

In 1982, law professor Peter Irons found that the Justice Department had withheld or destroyed evidence before the Korematsu case reached the Supreme Court. He assembled a team of Japanese american lawyers who successfully petitioned for the dismissal of charges against Korematsu forty years before by the Ninth Circuit Court of Appeals.

In 1990, reparations were made to surviving internees and their heirs in the form of a formal apology by the U.S. government and a check for $20,000.

This is an important story about which too many Americans are unaware. In addition, as Reeves quotes one veteran and local historian:

This is a great nation, and we’ve done many wonderful things. … This isn’t one of them, and we always need to be mindful of how we treat and how we interact with each other.”

December 15, 1791 – Congress Ratifies the Bill of Rights, Thanks in Part to George Mason

One of the people most responsible for the Bill of Rights, ratified on this day in history, is generally forgotten in the invocation of our pantheon of Founders, and that is George Mason.

George Mason

Jeff Broadwater has written a biography of Mason (George Mason: Forgotten Founder, 2006) in which he attempts to educate us not only on Mason’s role but on why it may not be as well-known as the roles of the other Founders.

Broadwater points out the following:

  • Mason was a mentor to George Washington.
  • Mason took the lead in drafting Virginia’s first state constitution and its famous Declaration of Rights, which influenced not only Thomas Jefferson (he adopted the second paragraph for the Declaration of Independence) but all constitution writers who followed.
  • He was one of the most respected delegates to the Convention and had a great influence on the shape of the emerging government. (Notably, Mason shared Adams’ fear of unchecked government because he feared corruption in the political process.)
  • Mason’s insistence at the Philadelphia Convention of 1787 that a bill of rights be appended to the federal Constitution is routinely credited with initiating the movement that culminated in the first ten amendments, known as The Bill of Rights.


Why don’t we know more about Mason? Broadwater argues (1) Mason refused to sign the Constitution because he thought it failed to protect the interests of minorities, and because he could not in good conscience endorse the expansion of slavery (although he was not an abolitionist); (2) Mason died in 1792, and thus did not play a major role in the new government; and (3) Mason himself had a reluctance to seek the historical spotlight.

[On the matter of slavery, Mason was a slaveholder himself, but opposed it for economic reasons. His view was that land was being cleared and planted with tobacco faster than the market for it could expand, meaning that its price would drop even as more and more capital became tied up in land and slaves. Moreover, such a system would result in a huge future slave population in Virginia, which could only cause trouble.]

We owe him a great deal, however, and it is therefore appropriate we remember him on this anniversary of the nation’s adoption of the first ten amendments.

(Of the original twelve, Articles 3-12 were ratified. Accordingly, in 1791 these articles became the first ten amendments to the Constitution…..known collectively as The Bill of Rights.)

Here are the original twelve amendments as they appear in The Laws of The United States of America, printed by Richard Folwell, Philadelphia, in 1796.


December 8, 1993 – NAFTA Signed Into Law

The North American Free Trade Agreement (NAFTA) was signed into law by President Bill Clinton on this date in history. NAFTA, a trade pact between the United States, Canada, and Mexico, eliminated virtually all tariffs and trade restrictions among the three nations. However, no protections were contained in the core of the agreement to maintain labor or environmental standards. As a result, NAFTA tilted the economic playing field in favor of investors, and against workers and the environment, resulting in a hemispheric “race to the bottom” in wages and environmental quality in the United States, Canada, and Mexico.

Credit: McGraw-Hill Education/Mike Wirth

Credit: McGraw-Hill Education/Mike Wirth

Americans were promised that NAFTA would generate large numbers of net new good jobs. According to the Council on Foreign Relations, economists largely agree that NAFTA provided benefits to the North American economies. Regional trade increased sharply over the treaty’s first two decades, from roughly $290 billion in 1993 to more than $1.1 trillion in 2016. Cross-border investment also surged, with U.S. foreign direct investment (FDI) stock in Mexico increasing in that period from $15 billion to more than $100 billion. But there have also been downsides.

Mexican employment did increase, but much of it in low-wage “maquiladora” industries. These are plants that moved to this region in Mexico from the U.S. near the border. U.S. companies were ecstatic to find that they could pay much lower wages to Mexicans. Mexican women work for approximately one-sixth of the U.S. hourly rate. The income one receives from work in a maquiladora is rarely enough to support a family.

Map of Mexico's maquiladora plants from The Cutting Edge

Map of Mexico’s maquiladora plants from The Cutting Edge

In addition, the dense number of maquiladoras and the inability of Mexico’s environmental regulatory program to keep up with the rapid growth of the industry over the past quarter of a century have contributed to major environmental problems. Both the United States and Mexican governments claim to be committed to environmental protection, yet environmental policies have not always been enforced. Some companies avoid paying disposal costs by dumping toxins and other waste into Mexico’s rivers or deserts. The United States Environmental Protection Agency reports that only 91 of the 600 maquiladoras located along the Texas-Mexico border have disposed of waste properly. But the women who work at the maquiladoras and live nearby have children who must then grow up and play in contaminated areas. (You can read more details about the hazardous waste problems here.)

Unfortunately, there were additional dangers for female workers. As reported by a Federal Advisory Committee to the U.S. Environmental Protection Agency:

“Female workers at maquiladoras face especially serious problems. They often work in an atmosphere that includes sexual assault, violence, wage inequality, and discrimination against pregnant women.”

The continued willingness every year of hundreds of thousands of Mexican citizens to risk their lives crossing the border to the United States because they cannot make a living at home is in itself testimony to the failure of NAFTA to deliver on the promises of its promoters.

Defenders of NAFTA have two main responses. One is that the low pay given to workers abroad is still more than they could have earned without NAFTA. But it is still mistreatment, and still not a living wage. CEOs back in the U.S. who make this argument make it from their corner offices in air-conditioned high rises with floor-to-ceiling window views of their corporate fiefdoms. They would never live or work in the depressed conditions that end up supporting their lifestyles.

Political cartoon by Nick Anderson / The Houston Chronicle.

Political cartoon by Nick Anderson / The Houston Chronicle.

Supporters of NAFTA also argue that the problems of inequality are largely the result of domestic policies and have nothing to do with globalization. Yet that ignores the enormous increase in bargaining leverage over all workers provided by the ability to shift production out of the country.

As researchers at the Economic Policy Institute argue:

The reality is that the denial of social protections in the rules of an internationally integrated market inevitably undermines the protections established in the previously separate domestic economies after decades of political struggle. In that sense, the ‘vision’ of NAFTA is profoundly reactionary: it pushes nations back toward a 19th century ideology in which government’s economic function is to protect the interests of investors, while working people — the overwhelming majority in each nation — are left to fend for themselves.”

President Trump asserts NAFTA has undermined U.S. jobs and manufacturing, but the Council of Foreign Relations pointed out that while economists acknowledge troubles with U.S. manufacturing, they claim it has little to do with NAFTA. They cite effects of competition with China as well as technological changes, such as increasing automation.

Nevertheless, in October, 2018, President Trump struck a deal with Canada and Mexico on an updated version of the pact, to be known as the U.S.-Mexico-Canada Agreement, or USMCA. (To take effect, the deal will have to be approved by all three countries’ legislatures; the earliest that the U.S. Congress could vote would be early 2019.)

In the updated pact, the parties settled on a number of changes. Rules of origin for the auto industry were tightened, requiring 75 percent of each vehicle to originate in the member countries, up from 62.5 percent. New labor stipulations were added, requiring 40 percent of each vehicle to come from factories paying at least $16 an hour. Trump backed down on his threats to apply tariffs on Canadian and Mexican auto imports; the existing steel and aluminum tariffs, however, were not lifted. Meanwhile, protections for U.S. pharmaceuticals and other intellectual property were strengthened.

An analysis published by Wharton School of Business is generally favorable about the new deal, with Wharton legal studies and business ethics professor Philip Nichols describing the USMCA as “a shockingly reasonable agreement given President Trump’s professed disdain for reasonable trade agreements.”

December 6, 1906 – President Theodore Roosevelt Pontificates on the Cause of Lynching

On this day in history, Roosevelt delivered his sixth annual message to Congress.

Roosevelt subscribed to the popular view of some circles in his era that the white race was superior. He bought into (and himself espoused) the eugenics theories of the time that inspired the rise of the Nazi Party a generation later. He saw life as a violent struggle between the strong and the weak, with whites being “the forward race” and blacks and other non-whites “intellectually inferior.”

In 1905, speaking to the Republican Club in New York City, he said that if “morality and thrift among the colored men can be raised,” then those same virtues among whites, which most Americans assumed to be more advanced, would “rise to an even higher degree.” At the same time, he warned that “the debasement of the blacks will, in the end, carry with it [the] debasement of the whites.”

While TR is known for inviting Booker T. Washington, a black man, to the White House, as PBS points out, “Roosevelt invited Washington not to improve the situation of blacks, but because they agreed that blacks should not strive for political and social equality.”

Roosevelt’s Administration actually decreased the number of federal appointments to blacks, with Roosevelt promising Southerners that he would appoint local federal officials that would not disrupt the accord between north and south.

Roosevelt advocated that whites should breed as much as possible – otherwise they risked “race suicide”.

President Theodore Roosevelt

On December 6, 1906, in his address to Congress, he raised the problem of lynching of black men in the South:

. . . I call your attention and the attention of the Nation to the prevalence of crime among us, and above all to the epidemic of lynching and mob violence that springs up, now in one part of our country, now in another. . . . . A great many white men are lynched, but the crime is peculiarly frequent in respect to black men. The greatest existing cause of lynching is the perpetration, especially by black men, of the hideous crime of rape–the most abominable in all the category of crimes, even worse than murder. Mobs frequently avenge the commission of this crime by themselves torturing to death the man committing it; thus avenging in bestial fashion a bestial deed, and reducing themselves to a level with the criminal.”

He then seems to contradict his point by admitting:

Lawlessness grows by what it feeds upon; and when mobs begin to lynch for rape they speedily extend the sphere of their operations and lynch for many other kinds of crimes, so that two-thirds of the lynchings are not for rape at all; while a considerable proportion of the individuals lynched are innocent of all crime.”

Regardless of the cause, Roosevelt issues a plea for adherence to the rule of law:

The lesson is this: No good citizen can afford to countenance a defiance of the statutes, no matter what the provocation. The innocent frequently suffer, and, it is my observation, more usually suffer than the guilty. The white people of the South indict the whole colored race on the ground that even the better elements lend no assistance whatever in ferreting out criminals of their own color. The respectable colored people must learn not to harbor their criminals, but to assist the officers in bringing them to justice. This is the larger crime, and it provokes such atrocious offenses as the one at Atlanta. The two races can never get on until there is an understanding on the part of both to make common cause with the law-abiding against criminals of any color.”

In other words, blacks have an obligation to make sure these alleged black rapists of white women are brought to justice in order to prevent lynching:

Every colored man should realize that the worst enemy of his race is the negro criminal, and above all the negro criminal who commits the dreadful crime of rape; and it should be felt as in the highest degree an offense against the whole country, and against the colored race in particular, for a colored man to fail to help the officers of the law in hunting down with all possible earnestness and zeal every such infamous offender. Moreover, in my judgment, the crime of rape should always be punished with death, as is the case with murder; assault with intent to commit rape should be made a capital crime, at least in the discretion of the court; and provision should be made by which the punishment may follow immediately upon the heels of the offense; while the trial should be so conducted that the victim need not be wantonly shamed while giving testimony, and that the least possible publicity shall be given to the details.”

As he concludes on this particular issue:

Let justice be both sure and swift; but let it be justice under the law, and not the wild and crooked savagery of a mob.”

The full text is here.